Arkansas Real Estate License Property Valuation and Financing Questions and Answers

Question 1

An appraiser is using the cost approach to determine the value of a 10-year-old single-family home in a stable neighborhood.
After calculating the replacement cost of the structure, what is the next step in the process?

Accepted Answer

Subtract the accrued depreciation from the replacement cost.

Answer

Determine the value of the land.

Answer

Analyze comparable sales in the area.

Answer

Calculate the potential rental income.

Question 2

A first-time homebuyer in Arkansas is seeking a loan with the lowest possible down payment. They have a credit score of 600. Which loan program would most likely meet their needs?

Accepted Answer

FHA Loan

Answer

Conventional Loan

Answer

VA Loan

Answer

Rural Development Loan

Question 3

A buyer is purchasing a home for $250,000 and is obtaining a loan for $200,000. What is the loan-to-value (LTV) ratio for this transaction?

Accepted Answer

80%

Answer

75%

Answer

85%

Answer

125%

Question 4

Which of the following is a key feature of a VA-guaranteed loan that benefits a veteran homebuyer?

Accepted Answer

A one-time VA funding fee is typically required instead of monthly mortgage insurance.

Answer

A mandatory minimum 3.5% down payment is required.

Answer

The loan requires the borrower to pay monthly private mortgage insurance (PMI).

Answer

The loan is directly funded by the Department of Veterans Affairs.

Question 5

Under Arkansas law, how is the 'assessed value' of a property calculated for tax purposes?

Accepted Answer

It is calculated as 20% of the property's true market value.

Answer

It is set at 100% of the property's appraised market value.

Answer

It is determined by the most recent sale price of the property.

Answer

It is a fixed amount based on the property's square footage.

Question 6

A private lender in Arkansas makes a non-mortgage consumer loan to an individual. Which of the following is true regarding the interest rate under Arkansas's usury laws?

Accepted Answer

The state constitution sets a maximum interest rate, which for most consumer contracts is 17% per year.

Answer

There is no maximum interest rate limit for any loan in Arkansas.

Answer

The maximum rate is fixed at 10% per annum by the state constitution.

Answer

Lenders can charge any interest rate agreed upon in the contract.

An appraiser is using the cost approach to determine the value of a 10-year-old single-family home in a stable neighborhood.After calculating the replacement cost of the structure, what is the next step in the process?

An appraiser is using the cost approach to determine the value of a 10-year-old single-family home in a stable neighborhood.
After calculating the replacement cost of the structure, what is the next step in the process?